AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A UK business must register for VAT when its taxable turnover in any rolling 12 months goes over £90,000, or when it expects to pass £90,000 in the next 30 days alone. For a founder with Nigerian clients and suppliers, the catch is what counts: business-to-business services sold to Nigerian companies are generally outside the scope of UK VAT and do not count, while services bought from Nigerian suppliers that fall under the reverse charge are added to the total.
Founders who run a UK company with clients, staff or contractors in Nigeria often check their sales against the VAT threshold and stop there. The test is more particular than that. HMRC looks at taxable turnover, and cross-border work moves amounts in and out of that figure in ways that surprise people in both directions. This guide sets out the test as GOV.UK states it in October 2026 and shows how Nigerian business changes the sum.
The two tests HMRC applies
GOV.UK's 'When to register' page, updated on 30 September 2026, sets two triggers:
- Backward test
- Your total taxable turnover for the last 12 months goes over £90,000. This is a rolling window checked at every month end, not your tax year. You must register within 30 days of the end of the month you went over, and registration takes effect from the first day of the second month after.
- Forward test
- You expect taxable turnover to go over £90,000 in the next 30 days alone. You register by the end of that 30-day period, and the effective date is the date you realised you would go over.
GOV.UK adds that taxable turnover excludes sales that are exempt from VAT and sales that are outside its scope. That second exclusion is where the Nigerian side of a business matters most.
What counts and what does not for a UK–Nigeria business
HMRC's VAT Notice 741A sets the place of supply for services. Under the general business-to-business rule, a service is supplied where the customer belongs. So consultancy, design or software work your UK company sells to a company in Lagos is, under that rule, supplied in Nigeria and outside the scope of UK VAT. ACCA's guidance on the same rule notes that such supplies go in Box 6 of the VAT return once you are registered, and that you should hold evidence that the customer is in business.
| Item | Counts towards the £90,000? | Why |
|---|---|---|
| Sales to UK customers (standard, reduced or zero-rated) | Yes | Taxable supplies in the UK |
| B2B services to a Nigerian company (general rule) | Generally no | Supplied where the customer belongs, so outside the scope of UK VAT |
| Services to Nigerian private individuals | Depends on the service | Notice 741A has special rules; some consumer services sold abroad are also outside UK VAT |
| Services bought from a Nigerian supplier under the general rule | Yes, via the reverse charge | Notice 741A s.5.7: their value is added to your own taxable supplies |
| Exempt sales (for example some financial services) | No | Excluded by GOV.UK's definition |
The fourth row catches founders out. Notice 741A section 5.7 says that where you receive general-rule services from overseas, 'the value of those supplies must be added to the value of your own taxable supplies' for the registration test, and you may need to register even if you make no taxable supplies of your own. The reverse charge itself is explained in reverse charge on services bought from Nigeria.
Worked example: a London software studio with a Lagos team
Example figures only. Over the 12 months to the end of March, a UK company records:
- £60,000 of development work for UK clients
- £50,000 of development work for two Lagos companies (B2B, general rule)
- £35,000 paid to a Nigerian contractor firm for coding services
Counting sales alone gives £110,000, which looks like a breach. But the £50,000 to Lagos companies is outside the scope of UK VAT and drops out, leaving £60,000. The £35,000 of reverse-charge services then goes back in, giving £95,000. The company is over the threshold, but for a different reason than the founder expected, and it must register within 30 days of the end of March.
If your company is Nigerian, not British
GOV.UK says a business based outside the UK that supplies goods or services in the UK must register whatever its turnover. A Nigerian company selling taxable services into the UK therefore has no threshold to rely on, unless its supplies are B2B services that the UK customer accounts for under the reverse charge. Whether that applies turns on the type of service and the customer, so check Notice 741A before invoicing.
Steps for a founder near the line
- At each month end, total the last 12 months of UK taxable sales.
- Remove B2B services sold to Nigerian businesses, and keep evidence that each customer is in business (a CAC number or Tax ID on the contract helps).
- Add any general-rule services bought from Nigerian or other overseas suppliers.
- Check the forward test whenever you sign a large contract.
- If you cross, register within 30 days of the month end and start charging VAT from the effective date. Late registration means paying VAT on sales since the date you should have registered.
- Remember that Nigeria has its own VAT test for any Nigerian company in the group; see whether a small business in Nigeria has to charge VAT.
For the general mechanics of the threshold, including voluntary registration, see the £90,000 VAT threshold for a new UK business. For how to treat the Lagos sales once registered, see VAT on services to Nigerian clients.
Where Pryme fits
A Pryme Business Account keeps pounds and naira in separate balances, so UK sales, Nigerian sales and payments to Nigerian suppliers sit apart and are easier to total for the monthly check. The Finance agent can prepare that rolling 12-month figure; a person reviews it before anything is filed.
Questions people ask
Do sales to Nigerian companies count towards the UK VAT threshold?
Under the general B2B rule in HMRC's Notice 741A, services to a business customer in Nigeria are supplied where the customer belongs and are outside the scope of UK VAT, so they do not count. Goods and some special services follow different rules.
Can paying a Nigerian contractor push me over the VAT threshold?
Yes. Notice 741A s.5.7 says the value of general-rule services received from overseas is added to your own taxable supplies when you test against £90,000.
Is the UK VAT threshold based on the tax year?
No. GOV.UK uses any rolling 12-month period, checked at each month end, plus a separate test for the next 30 days.
Does a Nigerian company selling to UK customers need UK VAT registration?
GOV.UK says a non-UK business supplying goods or services in the UK must register regardless of turnover. B2B services the UK customer reverse-charges may not create that need; check the service type.
Sources
- GOV.UK: VAT registration, when to register (updated 30 Sep 2026) · accessed Oct 2026
- HMRC VAT Notice 741A: place of supply of services · accessed Oct 2026
- ACCA In Practice: VAT on services to customers outside the UK · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.